BPI profit up 29.5% as of Sept

Ayala-led Bank of the Philippine Islands (BPI) grew its net profit at end-September by 29.5 percent year-on-year to P22.03 billion on strong earnings from its lending, treasury and fee-based businesses.

For the third quarter alone, the net profit of Southeast Asia’s oldest bank rose by 38.6 percent year-on-year to P8.29 billion, the bank disclosed to the Philippine Stock Exchange on Wednesday.

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As the third quarter results were better than expected, BPI shares gained by 1.06 percent to close at P95 per share on Thursday. It was the day’s second-most actively traded company.

Total revenue for the nine-month period increased by 24.8 percent to P71 billion, driven by a 19.8-percent year-on-year growth in net interest income, which reached P48.66 billion.

The bank also grew its loan book by 8.2 percent year-on-year to reach P1.37 trillion at end-September, driven by the consumer and corporate loan segments, which rose by 12.5 percent and 7.4 percent, respectively. Within the consumer segment, credit card loan grew by 24.6 percent year-on-year.

On the other hand, noninterest income reached P22.34 billion in the nine-month period, marking a 37.5-percent increase year-on-year, driven by higher securities trading gains and fee-based income.

The bank’s total securities position stood at P392.99 billion, up by 17.3 percent year-on-year. Fees, commissions and other income increased by 19.1 percent year-on-year, primarily from higher fee revenues from credit cards, transaction banking, electronic channels, deposit products and insurance.

On the funding side, total deposits reached P1.62 trillion, higher by 5 percent year-on-year. Of the total, 69.1 percent were low-cost deposits.

For every peso of deposit liabilities generated by the bank for the period, it converted 84.7 centavos into earning assets by lending them out.

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Operating expenses stood at P37.09 billion, higher by 15.6 percent year-on-year. The bank spent 52.2 centavos for every peso earned, lower than 56.4 centavos in the same period last year.

Provision for losses for the nine-month period—including for bankrupt shipping firm Hanjin—stood at P4.58 billion. For every peso of bad loan, the bank has set aside a buffer of P1.027.

Bad loans accounted for 1.81 percent of total portfolio, flat compared to the previous year.

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